The Trump administration and several state governors on Friday urged the largest electricity grid in the U.S. to make the big technology companies pay for new power plants.
Electricity prices have exploded in recent years on PJM Interconnection due in part to the data centers that tech companies are building to train and power artificial intelligence.
The PJM grid serves more than 65 million people across 13 states and Washington, D.C. Its service area includes northern Virginia, the largest data center market in the world.
The Trump administration and several states signed a pact that calls for tech companies to pay for new power plants built in PJM. Leading tech companies have agreed to fund $15 billion of new generation for the grid, according to an administration statement.
The Trump administration and the states urged PJM to hold an emergency capacity auction to procure this power, according to the Department of Energy. PJM should also cap the amount that existing power plants can charge in the grid’s capacity market to protect ratepayers, according to the administration.
Interior Secretary Doug Burgum and Energy Secretary Chris Wright unveiled the plan at the White House with Maryland Gov. Wes Moore, Pennsylvania Gov. Josh Shapiro and outgoing Virginia Gov. Glenn Youngkin. PJM representatives were not at the event.
“We have to get out from underneath this bureaucratic system that we have in the regional grid operators and we’ve got to allow markets to work,” Burgum said at the White House. “One of the ways markets can work is to have the hyperscalers actually rapidly building power.”
Utility bills are rising in many parts of the U.S. despite Trump’s promise to lower energy prices during his presidential campaign. The issue played a major role in the landslide victories of Democrats Mikie Sherrill and Abigail Spanberger in the governors’ races of New Jersey and Virginia, respectively.
The price to secure power capacity in PJM has exploded in recent years with $23 billion attributable to data centers, according to watchdog Monitoring Analytics. Those costs are passed down to consumers. This amounts to a “massive wealth transfer,” the watchdog told PJM in a November letter.
PJM was six gigawatts short of its reliability requirement for 2027 in its most recent auction. Six gigawatts is equivalent to six large nuclear plants.
Gov. Shapiro threatened to withdraw from PJM if it does not accept the proposed reforms.
“Make no mistake if PJM, this sort of faceless bureaucratic organization that is driving prices up on the American people, does not change and does not reflect what we are putting forth here today, Pennsylvania will be forced to act and forced to go it alone,” Shapiro said.
PJM said in a statement that it is reviewing the proposals laid out by the White House and the governors.
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